Githae to appoint unclaimed assets board members

Finance minister Njeru Githae is set to name five appointees to the board of the Unclaimed Financial Assets Authority, which is expected to assume custody of up to Sh200 billion held by private companies and state corporations.

The board will be appointing managers for the Authority, whose mandate is set to come into effect on November 1.

“I am working on the board. It is not a recruitment, we are going to appoint them directly,” said Mr Githae, who, however, did not give timelines for the appointments.

Companies will be required by law to surrender to the Authority all cash that has been unclaimed by beneficiaries for more than three years.

Such monies include dividend payments, bank account balances, pension dues and insurance payments.

The board is expected to be constituted of seven persons who include the chief executive, permanent secretary to the Treasury and five persons selected by the ministers.

As per the Unclaimed Assets Act which was passed last year November, the five appointees shall constitute an expert in banking and investment, insurance, unclaimed assets, accounts or law and a representative of consumers’ interests.

The chief executive will be recruited through a competitive process.

The mandate of the board will also include making payments out of the fund to the rightful owners, and managing and investing the funds of the Authority.

Even before formation of the authority, companies have been advising shareholders who have not been claiming their dividends to do so before November. Institutions have been making efforts to notify beneficiaries.

Some of the companies that have issued notices to their shareholders include Mumias Sugar Company, Eveready, KCB, NBK and Barclays Bank.

READ: KCB puts shareholders on notice over dividends

“We would like to notify all our shareholders that all unclaimed dividends outstanding for a period of more than three years will be surrendered by November 1 as per the provisions of the Act,” said National Bank in a recent public notice.

As at end of 2011, Barclays Bank was holding Sh573 million, Centum Investment had Sh34 million, NBK had 21 million and Bamburi Cement had Sh29 million in unclaimed dividends underlining the magnitude of the issue.

Mumias Sugar Company is also holding share certificates which it also intends to submit to the authority.

“The unclaimed dividends relate substantially to those payable to shareholders who had unresolved share certificate issues at the end of the reporting period. These shares are held in trust by Kanouti Trustees,” said the company in a statement.

Eveready Limited which listed in the Nairobi Securities Exchange in 2006 intends to also pay over the IPO refunds to the authority.

Other financial assets to be submitted to the authority include travellers cheques and money orders that go unclaimed for two years.

The government estimates the value of unclaimed assets at Sh200 billion; an amount that can have a huge impact in the economy if put into productive use.

Creation of the authority is meant to safeguard assets of the claimants, and also provide funds for financing social projects since the Authority will have the mandate to invest the accumulated funds.

Dormant accounts have been a target of fraudsters in the banking industry, some initiated by bank staff.